Airborne 12.09.16

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Airborne 12.09.16

Stands To Lose Billions In Defense Work

If it's bad news for Boeing, it's
bad news for Seattle... and the Seattle Times has broken down the
potential impact on the region of the defense realignment announced
Monday by US Secretary of Defense Robert Gates.

As ANN reported, Gates proposed a Pentagon
budget that, if approved in its current form by Congress, would cap
production of the F-22A Raptor fighter at 187 units, and end
further work on the VH-71 presidential helicopter and the US Air
Force combat search and rescue helicopter (CSAR-X) contract.

Despite what would appear initially to be sizable losses for,
not Boeing, but Lockheed Martin -- which builds the Raptor, and is
primary contractor on the VH-71 -- analyst Loren Thompson of the
Lexington Institute observes, "Boeing seems to have been hit harder
than any of the other major contractors."

Boeing makes the wings for the Raptor, which now appears likely
to end production in 2011. That accounts for about 1,200 Boeing
workers. The company has also been a bidder to develop the CSAR-X
helicopter, as well as the TSAT satellite constellation. Those
potential cancellations are worth tens-of-billions of dollars.

In one bright note, Gates did commit to a third round of bidding
for a new Air Force aerial tanker this year. Boeing is expected to
bid its KC-767 yet again, against the EADS/Northrop Grumman KC-30A,
which won the last round of bidding.